Common use of Certification Costs Clause in Contracts

Certification Costs. As part of the normal course of doing business, the Advanced Recorders entity is required to incur certification costs prior to the production of new products. Advanced Recorders' policy is to capitalize these costs and amortize them on a straight-line basis over a 10 year period. As of December 31, 1996, approximately $3.4 million of unamortized certification costs are included in the combined statement of net tangible assets. Financial Instruments At December 31, 1996, the carrying value of the L-3 Communications financial instruments such as receivables, accounts payable and accrued liabilities approximate fair vale, based on the short-term maturities of these instruments. L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statement of Net Tangible Assets (continued)

Certification Costs. As part of the normal course of doing business, the Advanced Recorders entity is required to incur certification costs prior to the production of new products. Advanced Recorders' policy is to capitalize these costs and amortize them on a straight-line basis over a 10 year period. As of December 31, 1996, approximately $3.4 million of unamortized certification costs are included in the combined statement of net tangible assets. Financial Instruments At December 31, 1996, the carrying value of the L-3 Communications Acquired-Entities Communications financial instruments such as receivablesreceivable, accounts payable and accrued liabilities approximate fair valevalue, based on the short-term maturities of these instruments. L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statement Statements of Net Tangible Assets (continued)